Annex 2 - Template for the chapter on Governance system of the RSR

Transcription

1 1. Annex 2 - Template for the chapter on Governance system of the RSR I. Template for insurance companies NB: the information requested by the NBB in addition to the information provided for in Delegated Regulation 2015/35 is designated below as a Belgian characteristic. Sub-chapters and sections of the chapter on Governance system of the RSR 1. Management structure, remuneration and shareholdership 1.1. Management bodies Description of the tasks and responsibilities of at least (i) the board of directors (ii) the management committee (or senior management); and (iii) where applicable: the audit committee/risk committee/remuneration committee Description of the composition and operation (frequency of meetings, internal regulations, internal rules on composition, etc.) of at least (i) the board of directors (ii) the management committee (or senior management); and (iii) where applicable: the audit committee/risk committee/remuneration committee 1.2. Remuneration Information on the remuneration policy and remuneration practices that apply to the members of the board of directors and the management committee, the persons responsible for independent control functions, the members of staff deemed risk takers and employees, including the manner in which the principles of Article 275 of the Delegated Regulation 2015/35 is complied with. Belgian characteristic: The remuneration entitlements of the members of the board of directors, the management committee, the persons responsible for independent control functions and of the risk takers during the reporting period => to be included in ecorporate as reporting B Shareholdership Information on the shareholders who have a qualifying holding in the company and, where applicable, information on the group structure. Information on the material transactions executed during the reporting period with shareholders, and persons that exercise a significant influence on the company (stating any cross-participations) Belgian characteristic: Information on any shareholder/member charters for the company 2. Fit & proper, external functions and transactions with managers 2.1. Fit & proper

2 2. Description of the Fit & Proper requirements applied by the company to the members of the board of directors and management committee and to the persons responsible for independent control functions (summary of the Fit & Proper policy) Description of the procedures for assessing the fitness and propriety of the members of the board of directors and the management committee and of the persons responsible for independent control functions Detailed information on the policies and processes established by the company to ensure that those persons are permanently fit and proper Belgian characteristic: Description of the implementation of the following criteria relating to the composition organisation of the management bodies: number of directors, duration and rotation of mandates, upper age limit, gender, etc External functions and incompatibilities Description of the principles included in the company s internal rules on external functions and incompatibilities 2.3. Loans, credits or guarantees and insurance policies for managers, shareholders, related institutions and related persons Belgian characteristic: Information on the material transactions executed during the reporting period with members of the board of directors or the management committee, the qualified shareholders, related institutions and related persons and especially the list of loans/credits or guarantees of more than 100,000 => summary in the RSR and figures to be included in ecorporate as reporting B Risk management system, ORSA process and risk management function 3.1. Risk management system Description of the company s risk management system, including the strategies, processes and reporting procedures applied in that respect, as well as the way in which this system succeeds in effectively and permanently identifying, calculating, monitoring, managing and reporting the risks to which the company is exposed or could be exposed on an individual or aggregate level Description of the way in which the risk management system, including the risk management function is integrated in the company s organisational structure and decision-making process For each risk category, the information on the company s objectives, strategies, processes and reporting procedures for risk management Information on significant risks to which the company is exposed in its insurance obligations and on the way in which these are taken into account in its overall solvency needs Information on all material risks that the company has identified and that are not fully included in the calculation of the solvency capital requirement Information on the way in which the company complies with its obligation to invest all of its assets in accordance with the prudent person principle Information on the way in which the company verifies whether credit assessments by external credit assessment institutions are adequate, including how and the extent to which credit assessments from external credit assessment institutions are used Results of the assessments regarding the extrapolation of the risk-free rate, the matching adjustment and the volatility adjustment 3.2. Own Risk and Solvency Assessment

3 3. Description of the company s procedure for complying with its obligation to conduct an Own Risk and Solvency Assessment as part of its risk management system, including how the Own Risk and Solvency Assessment is integrated into the company s organisational structure and decision-making process Statement detailing the frequency with which the Own Risk and Solvency Assessment is reviewed and approved by the company s board of directors and management committee (where applicable the senior management) Statement detailing how the company has determined its own solvency needs given its risk profile and how its capital management activities and its risk management system interact with each other Detailed information on the way in which the Own Risk and Solvency Assessments are conducted, documented and analysed internally Description of the way in which the Own Risk and Solvency Assessments are integrated into the company s management and decision-making processes 3.3. Risk management function Description of the tasks and method of implementation of the risk management function Belgian characteristic: Information on the status of the risk management function (place in the organisation chart, independence, reporting to the management bodies, charter, etc.) and its organisation (staffing resources, management of the function, methodology, interaction with the other control functions, etc.) Belgian characteristic: Description of the company s risk management charter/policy, the process for evaluating that charter, frequency of the evaluation and any significant changes to the charter during the reporting period 3.4. Contingency plans Belgian characteristic: Description of the process for preparing contingency plans (method used) 4. Operational structure, internal control system, compliance function, integrity and IT infrastructure 4.1. Organisational and operational structure Information on the allocation of responsibilities and distribution of functions Belgian characteristic: Information on the organisational/operational structure of the company: organisation chart, reporting lines, short overview of the main business units and of the supporting functions Belgian characteristic: Information on the financial and accounting process: investment management, capital management, valuation of assets and liabilities other than technical provisions Belgian characteristic: Information on the financial and prudential reporting 4.2. Internal control system Description of the company s internal control system (objectives set by the management bodies, rules on reporting of identified risks, rules for monitoring procedures, staff training, documentation and filing, etc.) Detailed information on the key procedures of the internal control system

4 4. List of responsible persons for independent control functions with, if relevant, (i) in case of outsourcing, information on the contact person responsible and the compliance with section of the overarching governance circular and (ii) in case of combination of functions on the head of a responsible person for the independent control function, information on the compliance with section of the overarching governance circular => names of the persons to be stipulated in ecorporate in the reporting B Compliance function Description of the tasks and method of implementation of the compliance function Belgian characteristic: Information on the status of the compliance function (place in the organisation chart, independence, reporting to the management bodies, charter etc.) and its organisation (staffing resources, management of the function, methodology, interaction with the other control functions, etc.) Belgian characteristic: Information on the compliance charter/policy, the process for evaluating that charter, frequency of the evaluation and any significant changes to the charter during the reporting period Integrity policy Belgian characteristic: Description of the integrity policy validated by the company and of the broad guidelines included therein on at least the following subjects: (i) company goals and values, (ii) prevention of money laundering and terrorist financing (in case of life insurance activities), (iii) whistleblowing, and (iv) conflicts of interest 4.5. IT infrastructure and continuity Belgian characteristic: Description of the principles taken into account as regards IT security, internet services and, where applicable, cloud computing Belgian characteristic: Description of the principles included in the continuity policy 5. Internal audit function Description of the tasks and method of implementation of the internal audit function (audit scope used, audit method used, etc.) Description of the way in which the company s internal audit function maintains its independence and objectiveness regarding audited work. Belgian characteristic: Information on the status of the internal audit function (place in the organisation chart, independence, reporting to the management bodies, charter, etc.) and its organisation (staffing resources, management of the function, methodology, interaction with the other control functions, etc.) Belgian characteristic: Description of the company s internal audit charter/policy, the process for evaluating that charter, frequency of the evaluation and any significant changes to the charter during the reporting period; 6. Actuarial function Description of the tasks and method of implementation of the actuarial function Belgian characteristic: Information on the status of the actuarial function (place in the organisation chart, independence, reporting to the management bodies, charter, etc.) and its organisation (staffing resources, management of the function, methodology, interaction with the other control functions, etc.) Belgian characteristic: Description of the company s actuarial function charter/policy, the process for evaluating that charter, frequency of the evaluation and any

5 5. significant changes to the charter during the reporting period; 7. Outsourcing Description of the main features of the insurance company s outsourcing policy including the process to determine whether a function or activity is a critical or important function or activity Perimeter of all critical or important functions or activities which are outsourced => Detailed list to be included in ecorporate as reporting B.9. Description of the reasons leading to the outsourcing of critical or important functions or activities Description of the mechanisms in place to monitor the outsourcing of the critical or important functions or activities Information on the service providers to which critical or major operational functions or activities are outsourced (list of persons responsible at the service providers) as well as the way in which the company ensures that the service providers comply with the requirements of Article 274(3)(a) of Delegated Regulation 2015/35 (performance indicators, identification of contact persons responsible, etc.) In case of outsourcing of independent control functions, description of the measures taken to answer to the additional prudential framework rules foreseen in section of the overarching governance circular (contact person responsible and direct reporting to the management bodies) 8. Other information All other governance information that is relevant to assess the appropriate nature of the governance system set up by the insurance company

6 6. II. Template for the entity responsible for an insurance group governed by Belgian law NB: the template below contains the same information as required from the individual insurance companies (insofar as this is relevant) plus some additional information on the group. The latter information is shown in bold below. Sub-chapters and sections of the chapter on Governance system of the RSR 1. Management structure and shareholdership of the entity responsible for the group 1.1. Governing bodies Description of the tasks and responsibilities of at least (i) the board of directors (ii) the management committee (or senior management); and (iii) where applicable: the audit committee/risk committee/remuneration committee Description of the composition and operation (frequency of meetings, internal regulations, internal rules on composition, etc.) of at least (i) the board of directors (ii) the management committee (or senior management); and (iii) where applicable: the audit committee/risk committee/remuneration committee Description of the mechanisms by which the internal governance of the group (interaction between the management bodies of the entity responsible for the group and the subsidiaries) can be safeguarded and, in particular, a description of the organisation of the supervision of subsidiaries by the entity responsible for the group 1.2. Remuneration Information on the remuneration policy and remuneration practices that apply to the members of the board of directors and the management committee, the persons responsible for independent control functions, the members of staff deemed risk takers and employees, including the manner in which the principles of Article 275 of the Delegated Regulation 2015/35 is complied with. This section should also include information on the general coherence of the remuneration policies of the group. Belgian characteristic: The remuneration entitlements of the members of the board of directors, the management committee, the persons responsible for independent control functions and the risk takers during the reporting period => to be included in ecorporate as reporting B Shareholdership Information on the shareholders who have a qualifying holding in the entity responsible for the group Information on the material transactions executed during the reporting period with shareholders, and persons that exercise a significant influence on the entity responsible for the group (stating any cross-participations) Belgian characteristic: Information on any shareholder/member charters for the company

7 7. 2. Expertise and professional integrity of the managers of the entity responsible for the group 2.1. Fit & proper Description of the Fit & Proper requirements applied by the entity responsible for the group to the members of the board of directors and management committee and to the persons responsible for independent control functions (summary of the Fit & Proper policy) Description of the process used by the entity responsible for the group for assessing the fitness and propriety of the members of the board of directors and the management committee, and of the persons responsible for independent control functions Detailed information on the policies and processes established by the entity responsible for the group to ensure that those persons are permanently fit and proper (in case of a reassessment of the F&P nature) Belgian characteristic: Description of the implementation of the following criteria relating to the composition organisation of the management bodies: number of directors, duration and rotation of mandates, upper age limit, gender, etc External functions and incompatibilities Description of the principles included in the internal rules on external functions and incompatibilities of the entity responsible for the group 2.3. Loans, credits or guarantees and insurance policies for managers, shareholders, related institutions and related persons Belgian characteristic: Information on the material transactions executed during the reporting period with members of the board of directors or the management committee, the qualified shareholders, related institutions and related persons and especially the list of loans/credits or guarantees of more than 100,000 => summary in the RSR and figures to be included in ecorporate as reporting B Risk management system, ORSA process and risk management function 3.1. Risk management system Description of the risk management system of the entity responsible for the group, including the strategies, processes and reporting procedures applied in that respect, as well as the way in which this system succeeds in effectively and permanently identifying, calculating, monitoring, managing and reporting the risks to which the entity responsible for the group is exposed or could be exposed on an individual or aggregate level Description of the way in which the risk management system, including the risk management function is integrated in the organisational structure and decisionmaking process of the entity responsible for the group Description of the way in which the risk management system and the reporting procedures are consistently applied in all companies that come under the group supervision For each risk category, information on the objectives, strategies, processes and reporting procedures for risk management of the entity responsible for the group Information on significant risks to which the entity responsible for the group is exposed in its insurance obligations and on the way in which these are taken into

8 8. account in its overall solvency needs Information on all material risks that the entity responsible for the group has identified and that are not fully incorporated in the calculation of the solvency capital requirement Information on the way in which the entity responsible for the group complies with its obligation to invest all of its assets in accordance with the prudent person principle Information on the way in which the entity responsible for the group verifies whether credit assessments by external credit assessment institutions are adequate, including how and the extent to which credit assessments from external credit assessment institutions are used Results of the assessments regarding the extrapolation of the risk-free rate, the matching adjustment and the volatility adjustment Where applicable, information on the subsidiaries included in the Own Risk and Solvency Assessment of the group Qualitative and quantitative information on specific material risks at a group level 3.2. Own Risk and Solvency Assessment Description of the procedure of the entity responsible for the group for complying with its obligation to conduct an Own Risk and Solvency Assessment as part of its risk management system, including how the Own Risk and Solvency Assessment is integrated into the organisational structure and decision-making process of the entity responsible for the group Statement detailing the frequency with which the Own Risk and Solvency Assessment is reviewed and approved by the board of directors and the management committee (where applicable the senior management) of the entity responsible for the group Statement detailing how the entity responsible for the group has determined its own solvency needs given its risk profile and how its capital management activities and its risk management system interact with each other Where applicable, a statement that the participating insurance company, insurance holding company or mixed financial holding company has used the option to consolidate all Own Risk and Solvency Assessments of the group in a single document Detailed information on the way in which the Own Risk and Solvency Assessments are conducted, documented and analysed internally Description of the way in which the Own Risk and Solvency Assessments are integrated into the management and decision-making processes of the entity responsible for the group 3.3. Risk management function Description of the tasks and method of implementation of the risk management function Belgian characteristic: Information on the status of the risk management function (place in the organisation chart, independence, reporting to the management bodies, charter, etc.) and its organisation (staffing resources, management of the function, methodology, interaction with the other control functions, etc.) Belgian characteristic: Description of the risk management charter/policy of the entity responsible for the group, the process for evaluating that charter, the frequency of the evaluation and any significant changes to the charter during the reporting period

9 9. Explanation of the mechanisms for coordination between the risk management function of the group and those of the insurance subsidiaries 3.4. Contingency plans Belgian characteristic: Description of the process for preparing contingency plans (method used) 4. Operational structure, internal control system, compliance function, integrity and IT infrastructure 4.1. Organisational and operational structure Information on the allocation of responsibilities and distribution of functions Belgian characteristic: Information on the organisational/operational structure of the entity responsible for the group: organisation chart, reporting lines, short overview of the main business units and of supporting functions Belgian characteristic: Information on the financial and accounting organisation: investment management, capital management, valuation of assets and liabilities other than technical provisions Belgian characteristic: Information on the financial and prudential reporting of the entity responsible for the group Specific distribution of tasks between the entity responsible for the group and the subsidiaries, including a delineation of the subsidiary s own responsibilities 4.2. Internal control system Description of the internal control system of the entity responsible for the group (objectives set by the management bodies, rules on reporting of identified risks, rules for monitoring procedures, staff training, documentation and filing, etc.) Description of the way in which the internal control system and the reporting procedures are consistently applied in all companies that come under the group supervision Detailed information on the key procedures of the internal control system of the entity responsible for the group List of responsible persons for independent control functions with, if relevant, (i) in case of outsourcing, information on the contact person responsible and the way the entity complies with section of the overarching governance circular and (ii) in case of combination of functions on the head of a responsible person for an independent control function, information on the way the entity complies with section of the overarching governance circular => names of the persons to be stipulated in ecorporate in the reporting B.12 Description of the way in which the internal control mechanisms of the group comply with the requirements established in Article 394, second paragraph of the Solvency II Law 4.3. Compliance function Description of the tasks and method of implementation of the compliance function Belgian characteristic: Information on the status of the compliance function (place in the organisation chart, independence, reporting to the management bodies, charter, etc.) and its organisation (staffing resources, management of the function, methodology, interaction with the other control functions, etc.) Belgian characteristic: Description of the compliance charter/policy of the entity responsible for the group, the process for evaluating that charter, the frequency of

10 10. the evaluation and any significant changes to the charter during the reporting period Integrity policy Belgian characteristic: Description of the integrity policy validated by the entity responsible for the group and of the broad guidelines included therein on at least the following subjects: (i) company goals and values, (ii) prevention of money laundering and terrorist financing (in case of life insurance activities), (iii) whistleblowing, and (iv) conflicts of interest 4.5. IT infrastructure and continuity Belgian characteristic: Description of the principles taken into account as regards IT security, internet services and, where applicable, cloud computing Belgian characteristic: Description of the principles included in the continuity policy 5. Internal audit function Description of the tasks and method of implementation of the internal audit function (audit scope used, audit method used, etc.) Description of the way in which the internal audit function of the entity responsible for the group maintains its independence and objectiveness regarding audited work Belgian characteristic: Information on the status of the internal audit function (place in the organisation chart, independence, reporting to the management bodies, charter, etc.) and its organisation (staffing resources, management of the function, methodology, interaction with the other control functions, etc.) Explanation of the mechanisms for coordination between the internal audit function of the group and those of the insurance subsidiaries Belgian characteristic: Description of the internal audit charter/policy of the entity responsible for the group, the process for evaluating that charter, frequency of the evaluation and any significant changes to the charter during the reporting period If the persons who exercise the internal audit function also fulfil other key functions, a quantitative and qualitative assessment of compliance with the conditions for avoiding conflicts of interest and for the suitability requirements as regards the risk profile of the entity responsible for the group 6. Actuarial function Description of the tasks and method of implementation of the actuarial function Belgian characteristic: Information on the status of the actuarial function (place in the organisation chart, independence, reporting to the management bodies, charter, etc.) and its organisation (staffing resources, management of the function, methodology, interaction with the other control functions, etc.) Belgian characteristic: Description of the actuarial function charter/policy of the entity responsible for the group, the process for evaluating that charter, frequency of the evaluation and any significant changes to the charter during the reporting period Explanation of the mechanisms for coordination between the actuarial function of the group and those of the insurance subsidiaries 7. Outsourcing Description of the main features of the insurance company s outsourcing policy including the process to determine whether a function or activity is a critical or important function or activity Perimeter of all critical or important functions or activities which are outsourced => Detailed list to be included in ecorporate as reporting B.9.

11 11. Description of the reasons leading to the outsourcing of critical or important functions or activities Description of the mechanisms in place to monitor the outsourcing of critical or important functions or activities Information on the material intragroup outsourcing agreements and the mechanisms in place for monitoring -from the entity responsible of the groupthese intragroup outsourcings Information on the service providers to which critical or major operational functions or activities are outsourced (list of persons responsible at the service providers) as well as the way in which the company ensures that the service providers comply with the requirements of Article 274(3)(a) of Delegated Regulation 2015/35 (performance indicators, identification of contact persons responsible, etc.) In case of outsourcing of independent control functions, description of the measures taken to answer to the additional prudential framework rules foreseen in section of the overarching governance circular (contact person responsible and direct reporting to the management bodies) 8. Other information All other governance information relevant for the assessment of the appropriate nature of the governance system set up at the level of the entity responsible for the group, and at a group level